Gaza conflict puts region on edge again
26 December 2023
For much of 2023, the defining narrative for the Middle East was one of reconciliation. From Iran and Saudi Arabia agreeing to rekindle diplomatic relations under a China-brokered deal in March, and Syria’s President Bashar al-Assad being welcomed to an Arab League summit in Riyadh in May, leaders favoured diplomacy over division.
Not all wounds healed, but even in Yemen an unofficial truce between Houthi rebels and Saudi-backed forces largely held throughout the year.
The Hamas assault on Israel on 7 October and Israel’s response dramatically altered the picture, although whether it will lead to lasting regional change remains to be seen.
Prior to the fighting, few minds in the region were focused on the Palestinian issue, with far more attention being paid to developing commercial and security ties. Saudi Arabia was widely thought to be edging closer to normalisation with Israel, with Israeli ministers starting to visit the kingdom regularly.
Israel’s Communications Minister Shlomo Karhi was in Riyadh on 1 October for a conference. Tourism Minister Haim Katz visited for a World Tourism Organisation event a week earlier.
Such trips are now off the agenda, with Riyadh focused on leading the Islamic world in condemning Israel. On 11 November, it hosted a joint summit of the Arab League and the Organisation of Islamic Cooperation. Among the attendees was Iran’s President Ebrahim Raisi – the first visit by an Iranian president to Saudi Arabia since 2012. Raisi used the occasion to invite Crown Prince Mohammed bin Salman al-Saud to visit Tehran, a sign that the pre-war trend for reconciliatory diplomacy has not entirely disappeared.
The Gaza conflict has been particularly difficult to navigate for Abraham Accord signatories Bahrain, Morocco and the UAE. Bahrain suspended economic ties with Israel, but there has been no sign from any of the three of wanting to break off relations altogether.
“How far the war goes will determine how the relationship [with Israel] develops,” said one analyst.
Some other diplomatic gains are also being made against the backdrop of the war. Qatari Prime Minister Sheikh Mohammed bin Abdulrahman al-Thani travelled to Manama on 17 November as part of an energetic diplomatic push to bring the Israeli/Palestinian war to an end.
Sheikh Mohammed held talks with Prime Minister and Crown Prince Salman bin Hamad al-Khalifa, and they agreed to revive long-abandoned plans to build a ‘friendship bridge’ between the countries.
Navigating the multi-polar world will remain a key challenge for Gulf powers in the year ahead
Another trend evident in recent years has also continued – namely the efforts by some Gulf powers to dilute their ties with Western allies and build stronger links with China, Russia and others.
A clear sign of this came in August when the UAE and Saudi Arabia were invited to join the Brics grouping of major non-Western economies. They are set to formally join in January.
But in an indication of their desire to maintain links with all sides, Saudi Arabia and the UAE then signed up to the India-Middle East-Europe Economic Corridor (Imec) initiative at the G20 summit in New Delhi, India, in mid-September.
Navigating the increasingly multi-polar world will remain a key challenge for Gulf powers in the year ahead.
Imminent peril
In other parts of the region, the situation holds more immediate peril. In Egypt, the economy is in a parlous state, with President Abdul Fattah al-Sisi relying on Gulf allies to prop up an economy facing over $29bn of debt repayments in 2024.
Neighbouring Libya remains divided between rival administrations with their own regional allies. Turkiye and Qatar have supported the Tripoli-based government of Prime Minister Abdulhamid al-Dbeibah, while Egypt, Saudi Arabia and the UAE back General Khalifa Haftar and his Libyan National Army in the east.
In Sudan, the UAE-backed Rapid Support Forces (RSF) have been fighting President General Abdel-Fattah Burhan’s Sudanese Armed Forces in a vicious civil war since April. Peace talks in Riyadh in late September failed to deliver a ceasefire, and the UAE has been implicated in the delivery of weapons to the RSF.
Tunisia is quieter, but the economy is in a delicate state and the lurch towards authoritarian dictatorship under President Kais Saied is making observers nervous.
Tensions between Algeria and Morocco are also problematic. The two countries have long been at odds over Western Sahara, but relations have become more strained in recent years, with Algiers severing diplomatic ties in 2021. Algerian coast guards killed two Moroccans in August 2023 when they strayed into Algerian waters on their jet skis – an incident that could have readily escalated.
In Iraq, political disagreements came to the fore in November when the Supreme Court removed parliamentary speaker Mohammed al-Halbousi – the country’s most powerful Sunni politician – from office. Iran-backed Iraqi militias have also been flexing their muscle since the Gaza war, launching dozens of attacks on US forces in the country.
Other Iraqi court rulings have also caused disquiet, particularly a September decision by the Constitutional Court to annul a bilateral treaty on sharing the Khor Abdullah waterway with Kuwait.
Iran meanwhile weathered the protests that erupted in the wake of Marsa Amini’s death in September 2022. Tehran’s emerging challenge is in managing the response of its regional allies to the Gaza conflict. The actions of its other allies
in the region – including the Houthis in Yemen and Hezbollah in Lebanon – could set the tone for the whole region in the year ahead.
Image: Smoke rises after Israeli air strikes on the city of Rafah in the southern Gaza Strip on 10 October 2023
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The 47-floor tower is expected to be developed at an estimated cost of SR2bn ($532m).
Dar Global is developing the project in collaboration with the US-based Trump Organisation.
The project is the latest addition to Dar Global's portfolio after it announced the development of two new projects in Riyadh with the Trump Organisation.
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Local firm submits lowest bid for $1.7bn Kuwait power project MEED EDITORIAL
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Kuwait-based International General Trading & Contracting has submitted the lowest bid for a contract to supply, install, operate and maintain combined cycle gas turbine (CCGT) units at the Subiya power and water distillation station.
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Kuwait looks to capitalise on consolidation of power James Gavin
12 August 2025
The passing of the debt law in March 2025 appeared to herald a new page being turned in Kuwait’s turbulent history, after a five-year period that witnessed 10 cabinet resignations, four parliamentary elections and repeated gridlock hamstringing decision-making.
Members of parliament (MPs) had previously blocked the government’s attempts to bring in legislation to allow the state to issue debt. However, more than one year on from emir Sheikh Meshal Al-Ahmad Al-Jaber Al-Sabah’s dissolution of the National Assembly and the suspension of key elements of the Kuwaiti constitution, the leadership managed to unshackle itself from traditional constraints on policymaking and pass the law.
Such reforms have real-world impacts on Kuwait. The public debt law allows the sovereign to issue up to KD30bn ($98bn) over 50 years, releasing funds to support centrepiece economic projects. Given that past political logjams had delayed economic reforms – contributing, according to Fitch Ratings, to a reduction in real GDP of 2.8% in 2024 – there should at least be some upside from moves that have drawn criticism for setting Kuwait on a path towards autocracy.
What would provide further reassurance that the emir’s consolidation of power is having a positive impact would be for the proposed residential mortgage law to be approved, which would allow banks to offer housing loans to Kuwaiti citizens.
Political uncertainty
Much is still unclear about the path forward. Parliament’s suspension is intended to be limited to its four-year term. This should allow for further measures of constitutional change designed to prevent a repeat of the impasse and delays that have frustrated ordinary Kuwaitis for many years.
The situation is not helped by the advanced age of Sheikh Meshal, who is about to turn 85. That leaves questions as to whether the legislature will ever return to its former status as an independent chamber able to scrutinise government actions, and whether a reformed parliament will emerge from the process – without the attendant political dysfunction that has marked its performance.
As one Kuwaiti analyst tells MEED, there is no evidence that radical political change is on the emir’s agenda. “The public does not expect the parliament’s suspension to last long. The system is broadly the same as before.”
Other analysts see a status quo setting in over the near- to medium-term, giving the leadership some room to manoeuvre.
“There’s no realistic prospect of a return of the National Assembly in the coming year, and the broader public’s dissatisfaction with MPs, viewed as largely responsible for the impasse and failure to support the country’s development, means there is less pressure on Sheikh Meshal to revive the legislature anytime soon,” says Kristian Ulrichsen, Middle East fellow at Rice University.
There is a strong sense in the leadership’s circle that decision-making is now proceeding more smoothly, and that popular frustrations with MPs’ actions over successive years leaves the executive with more leeway to develop a bold political and economic platform.
“Many Kuwaitis believed that allowing the broken system to continue as before would have achieved nothing. This has given Sheikh Meshal a level of support in his moves to consolidate power,” says Ulrichsen.
That does not mean that Sheikh Meshal’s proposed path will lead to success. “Suspending parliament was still a high-risk move by the emir, as with the legislature out of the way, there’s no-one but himself to blame if things go wrong,” says Ulrichsen.
Many Kuwaitis believed that allowing the broken system to continue as before would have achieved nothing
The extension of executive power has not meant an end to Kuwait’s political turbulence. The resignation of Finance Minister Nora Al-Fassam on 4 August, just weeks before she was due to compete here first year in office, is the latest in a series of high-level cabinet departures. No reason has been given for her quitting the cabinet.
Contentious rulings
A more lasting source of political turmoil is the controversial decision to remove the citizenship of an estimated 42,000 Kuwait citizens since September 2024, when the government enforced changes to the country’s Nationality Law.
This is proving the most contentious of the changes wrought by Sheikh Meshal since he took power in December 2023. Those affected include individuals who have been accused of creating fake family relationships to win citizenship and women naturalised via marriage to Kuwaitis.
The citizenship revocation campaign reflects a populist agenda to strengthen nationalist sentiment around conceptions of citizenship. While it may have won public support in its targeting of foreigners who have been accused of attempting to secure generous welfare entitlements that are the birthright of Kuwaitis of ancestral citizenship, its broad scope means it also risks incurring wider opposition, say analysts.
“The citizenship issue risks becoming the biggest challenge in Kuwait, more even than the suspension of parliament,” says Ulrichsen.
The Kuwaiti analyst sees the citizenship move as not explicitly politically motivated, but that it may over time inveigle regime supporters who are seen as more likely to marry people from outside Kuwait.
The citizenship issue risks becoming the biggest challenge in Kuwait, more even than the suspension of parliament
Kuwait’s political gaze is not just turned inward. Relations with its neighbours have also come into view recently, most notably with Iraq, with whom a dispute over a joint waterway has reignited.
A group of Iraqi politicians have claimed that a bilateral agreement from 2012 regulating navigation in the 120-kilometre-long Khor Abdullah channel separating the two countries infringes on Iraqi sovereignty. They have persuaded the Supreme Court in Baghdad to rule that approval of the scheme by the country’s parliament failed to meet constitutional requirements.
Iraqis have more recently accused Kuwaiti vessels of entering Iraq’s waters, ignoring Iraqi Navy requests for their withdrawal. Kuwait and its GCC partners have signalled their anger at this expression of Iraqi nationalist sentiment. Officials are hoping it does not escalate further, but if it does become an issue around which Iraqi political factions unite, Kuwait’s achievement in building a lasting understanding with Baghdad may be under threat – just three years after Iraq concluded its UN-instituted financial compensations relating to the occupation of Kuwait in 1990.
For now, the Kuwaiti approach is to dial down the hostility and let diplomacy take its course, however renewed friction with its large neighbour is not a prospect that will fill Kuwait’s leadership with joy.
Domestically, however, Sheikh Meshal may have reason to feel more confident. For now, he has sufficient political space to continue on his chosen path. The anticipated passing of a mortgage law in coming months would be one more signal to the public that his decisions have improved their lives. That focus on delivery would go a long way to ensuring that Kuwait’s critical voices remain dimmed for a while longer.
Momentum builds in Kuwait construction
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Gulf heads into a new era of aviation; Maghreb’s resilience rises despite global pressures; GCC banks expand issuance amid demand
Distributed to senior decision-makers in the region and around the world, the August 2025 edition of MEED Business Review includes:
> AGENDA 1: Middle East invests in giant airports> AGENDA 2: Broader region upgrades its airports> AGENDA 3: Global air travel shifts east> CURRENT AFFAIRS: Syria wrestles fragile security situation> GCC BANKS: Gulf banks navigate turbulent times> CONSTRUCTION: Soudah Peaks outlines project construction plans> INTERVIEW: SETS leads Saudi heritage preservation charge> LEADERSHIP: From plastic leakage to leadership in the Gulf> MAGHREB MARKET FOCUS: Maghreb pushes for stabilityTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/14451847/main.jpg